The S&P 500's incredible pace of record closing highs puts it on course for the best run in 26 years, an investment firm says
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- The S&P 500 index is on track for the most record closing highs since 1995, said Bespoke Investment Group.
- The "incredible pace" of wins includes 10 highs in the past 12 trading sessions.
- The index has climbed about 17% this year with 39 closing highs.
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Investors have been propelling the S&P 500 index to a string of record highs this year, driving the broad stock-market measure toward its best run in more than 25 years, according to Bespoke Investment Group.
The index, valued at roughly $36 trillion, has notched 39 closing highs through Monday's session, which was made possible by overcoming a modest intraday loss. The Dow Jones Industrial Average and the Nasdaq Composite also started the week by logging closing highs.
The S&P 500 at its current pace is headed toward 74 record highs on a closing basis for 2021, which would rank as the second-most of all time, Bespoke said. In 1995, there were 77 closing highs. Monday's win left the index with 10 record closes in the past 12 trading sessions "which is relatively uncommon over the last 50+ years," said Bespoke in a note published early Tuesday.
"Like home runs coming off the bat of Pete Alonso in last night's Home Run Derby, the S&P 500 is racking up record highs at an incredible pace lately," said Paul Hickey, co-founder of Bespoke Investment. The Mets' first baseman Monday night in Denver slammed 23 hits to win his second consecutive home-run derby.
The S&P 500 has jumped by nearly 17% this year, a performance that's been "entirely driven" by rising corporate earnings estimates of 21%, BofA said in a research note Monday. The firm, however, cautioned that big earnings beats for the second quarter doesn't guarantee gains for strong market returns.
In 1964, the broad index racked up 64 record closing highs and there were 62 in 2017.
"One caveat here is that, as the last two weeks have shown, new highs tend to come in bunches, but if the S&P 500 experiences a pullback, the rapid pace will dry up quickly," said Hickey. "Wherever the 2021 total winds up, the pace so far this year has been impressive, to say the least."